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Headline inflation refers to the change in the value of all goods on the basket. On which basis is the headline inflation measured?


1. Wholesale Price Index
2. Consumer Price Index for Industrial Worker
3. Combined Consumer Price Index
4. Urban Consumer Price Index

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Correct Answer - Option 1 : Wholesale Price Index

The correct answer is Wholesale Price Index.

  • Headline inflation:
    • Headline Inflation is the measure of total inflation within an economy.
    • It includes price rise in food, fuel and all other commodities.
    • The inflation rate expressed in the Wholesale Price Index (WPI) usually denotes the headline inflation.
    • Though Consumer Price Index (CPI) values are often higher, WPI values traditionally make headlines.
    • Headline inflation is more relevant for developing economies than developed economies.

  • Core Inflation:
    • Core inflation is also a term used to denote the extent of inflation in an economy.
    • But Core inflation does not consider the inflation in food and fuel.
    • This is a concept derived from headline inflation.
    • There is no index for direct measurement of core inflation and now it is measured by excluding food and fuel items from the Wholesale Price Index (WPI) or Consumer Price Index (CPI).

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